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HomeMy WebLinkAboutResolution - 3295 - Amendment #1 To Rate Agreement - SPS Company - 27% Decrease - 01_25_1990Resolution # 3295 January 25, 1990 I tem:.#21 DGV:da RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Rate Agree- ment and a First Amendment to the January 10, 1980, Agreement by and between the City of Lubbock, Texas, and Southwestern Public Service Com- pany, attached herewith, which shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 25th ATTEST: nerte Boyd, City Secr6tary APPROVED AS TO CONTENT: 1�42"u e s Carroll McDonald, Assistant .City Manager of Utilities APPROVED AS TO FORM: 0 Uen ald G. Vandiver, First Assistant City Attorney day of January 1990. B. C. McMINN, MAYOR 'R 3;� q-S UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION SOUTHWESTERN PUBLIC SERVICE COMPANY ) DOCKET NO. RATE AGREEMENT This rate agreement ("Rate Agreement") dated January 25th, 1990, is the culmination of negotiations between Southwestern Public Service Company ("Southwestern") and the City of Lubbock, Texas ("Customer") regarding the level of rates being charged by Southwestern to Customer for partial requirements firm service. I. SUMMARY OF RATE AGREEMENT Southwestern and Customer have negotiated this Rate Agreement which incorporates a decrease in base rates of approximately 27 percent from the currently effective interim base rates. The purpose of this Rate Agreement is to reflect in Customer's base rates Southwestern's lower costs to provide service to Customer as of January 1, 1990. These lower costs of service result primarily from (1) the termination on December 31, 1989 of Southwestern's purchase of surplus energy from Public Service Company of New Mexico of which a portion of the current reservation fee is included in Customer's existing base rates, (2) reduced capital costs, and (3) reduced federal income taxes arising from the Tax Reform Act of 1986. II. RATE SCHEDULES The rate schedules shown in Appendix A shall become effective on January 1, 1990 and shall replace the existing Service Schedule A. The rates will lock -in Customer's rate period in Docket No. ER85-477 and terminate Southwestern's collection of revenues subject to refund and surcharge in that docket. This Rate Agreement will not otherwise affect either the Docket No. ER84-604 or Docket No. ER85-477 cases. III. AMENDMENTS TO EXISTING AGREEMENT Customer and Southwestern have agreed to amend their existing agreement for the Customer's purchase of partial requirements power and energy. The amendments extend the minimum term through December 31, 2004. The amendments are shown on Appendix B. The letters attached to Appendix B reflect the intent of Customer to assign its agreement to the West Texas Municipal Power Agency and the intent of Southwestern to consent to the assignment as reflected by the request. IV. OTHER PROVISIONS (A) With respect to Customer's prorata share of the items listed below, the Commission's order approving this Rate Agreement shall constitute final authorization for Southwestern to utilize the following accounting principles for the period commencing January 1, 1990. a. Southwestern will continue to utilize full tax normalization as required by the Federal Energy Regulatory Commission; b. Southwestern's "South Georgia Catch-up" deferred tax provision will be based on the current federal income tax rate of 34 percent; -2- C. Southwestern will book its applicable book depreciation expense based on its 1988 depreciation study which includes a composite rate of 2.93 percent; and d. Southwestern will amortize the cost associated with the coal slurry research and development project through the year 2002. (B) If another partial requirements customer of Southwestern obtains a rate, including terms and conditions, different from that contained in this Rate Agreement, Southwestern will make the different rate, including all the terms and conditions, available to Customer at Customer's option. If accepted by Customer, the different rate will be effective at the same time it is effective for the other customer. (C) Customer agrees it will withdraw its pending complaint against Southwestern (Docket No. EL89-51-000). (D) Nothing contained in this Rate Agreement shall be construed as affecting in any way (a) the right of the party furnishing, causing to be furnished, or receiving service under the new rate schedules to unilaterally make application to the Federal Energy Regulatory Commission or other governmental body having jurisdiction for a change in rates or charges under Section 205 of the Federal Power Act and pursuant to the Commission's Rules and Regulations promulgated thereunder, and (b) the right of Customer to protest, object or to intervene concerning any such application by Southwestern or to make complaint before any governmental body having jurisdiction or petition for an investigation under Section 206 of the Federal Power Act concerning rates and charges, classification of service, or any provision, term, rule, regulation, condition of service or contract relating thereto. -3- V. COMMISSION APPROVAL This Rate Agreement shall become effective and binding only after the Commission has entered a final order approving it, without adding or imposing any condition or modification that is unacceptable to Southwestern or Customer. If the Commission does not approve this Rate Agreement without modification, either party may terminate this Rate Agreement in writing within 15 days after the Commission issues its order. VI. RESERVATIONS The various provisions of this Rate Agreement are not severable. Neither Customer nor Southwestern shall be deemed to have approved, accepted, agreed to, or consented to any concept, theory, principle or method underlying any of the rates, charges, classifications, cost of service, or any other matter, other than specifically provided for in this Rate Agreement. The provisions of this Rate Agreement are intended to relate only to the specific matters described herein. This Rate Agreement is executed as of the date first above written. CITY OF LUBBOCK, TEXAS By: J_ d-?'?'� _ T. C. MCMIN Title: MAYOR A 4 � � 7 - SOUTHW TERN PUBLIC SERVICE OkI ANY VA , By: Title: Vice P"resi€ ent ^i ^, -4- 3c�o APPENDIX A SERVICE SCHEDULE A FIRM POWER ARTICLE A-1 Definitions In addition to the words and terms defined in the Agreement to which this Service Schedule is attached, the following words and terms as used in this Service Schedule, shall have the following meanings unless the context or use indicates another or different meaning or intent. Section A-1.1. The term "Firm Power" as that term is used herein shall mean that quantity of electric power and energy, that Company will have available monthly to Customer in accordance with the terms and conditions of this Agreement. Section A-1.2. The term "kW" as that term is used herein shall mean kilowatt-hour per hour. Section A-1.3. The term "billing demand" as that term is used herein shall mean the quantity of firm power, expressed in kilowatts designated as provided in Section A-2.1. hereof and subject to the provisions of Sections A-4.1. and A-4.2. hereof. ARTICLE A-2 Designations of Quantities of Firm Power Section A-2.1. The Firm Power commitment for calendar years 1990 through 1994 shall be as follows: Calendar Year Firm Power Commitment 1990 20,000 kW 1991 20,000 kW 1992 25,000 kW 1993 30,000 kW 1994 40,000 kW On the first working day of 1991 and on the first working day of each calendar year thereafter during the life of the Agreement, City will submit to Company its Firm Power Commitment for the fifth succeeding year. City shall have the right to increase or decrease by not more than 30 percent (and then rounded to the nearest whole MW) the original nomination for any particular year, provided it does so in writing one year in advance of the affected year. Company will make such firm electric power and energy available to City as nominated, provided that Company has sufficient capacity in its existing facilities for any request for an increase in the Firm Power Commitment. A-1 ARTICLE A-3 Rates for Firm Power Section A-3.1. During the term of this Agreement or any extensions or renewals thereof, and subject to change as hereinafter provided, Customer hereby agrees to pay Company for firm power at the following monthly rates: Customer Charge: $320.00 per month per delivery point, Demand Charge: $6.80 per kW of firm power for all billing demand, and Energy Charge: .07c per kWh for all energy delivered. Section A-3.2. Fuel Cost Adjustment: The above energy charges will be increased per kWh of sales equal to the estimated fuel cost per kWh of sales in the current month and adjusted for the preceding month's estimate error. The energy charge adjustment shall be calculated in compliance with the formula and conditions set forth in the Wholesale Fuel Cost Adjustment Clause contained in Attachment 1 to this Service Schedule. Base period fuel cost per kWh of net generation is equal to zero cents. Section A-3.3. Billings under this Schedule may be increased by an amount equal to the sum of the taxes payable under federal, state and local sales tax acts, and all of the additional taxes, fees, or charges, (exclusive of ad valorem, state and federal income taxes) payable by the Company and levied or assessed by any governmental authority on the Company services rendered, or on the right or privilege of rendering the service, or on any object or event incidental to the rendition of the service, as the result of any new amended laws after January 1, 1990. ARTICLE A-4 Billing Demand Adjustments Billing demand shall be subject to the following adjustments: Section A-4.1. In the event the Company is unable to furnish the quantities of firm power designated by the City (as a result of force majeure) or in the event the City is unable to receive the quantities of firm power previously designated by the City (as a result of force majeure), billing demand shall be adjusted downward to the maximum power actually supplied, such downward adjustment to be effective from the date Company is so unable to furnish such quantities of firm power or from the date the City is so unable to receive such quantities of firm power, whichever is earlier, and shall be effective until such time as the reason thereafter is cured. Section A-4.2. In the event the City requests quantities of power exceeding the billing demand (hereinunder called excess billing demand) and Company provides such quantities as part of the Firm Power Commitment, the Firm Power Commitment, and the billing demand shall be adjusted upward by the Company by the amount of the excess billing demand, which adjustment shall be effective from the date such excess quantities are supplied and extending thereafter until changed as provided under Section A-2.1 above. If Company is not agreeable to providing such additional demand as part of the Firm Power A-2 Commitment, the City shall pay for the excess demand only for the billing month(s) in which the excess was taken. The Customer's excess billing demand shall be exempt from this adjustment if such excess is caused by an emergency or a nor. -firm energy sale. In that event, such excess shall be billed under the provisions of the applicable service schedule. A-3 SERVICE SCHEDULE A ATTACHMENT 1 WHOLESALE FUEL COST ADJUSTMENT CLAUSE 1. The charges for actual wholesale service rendered during the current billing period shall be increased or decreased by an adjustment amount, per kilowatt-hour of sales (to the nearest 0.0001c), equal to the difference between the estimated fuel cost (0) per kilowatt-hour of estimated sales (eS) in the current, or billing, period (m) and the base period (b), as adjusted to allow for wholesale losses (L), with the total charges adjusted by a dollar amount to correct for prior wholesale over or under collections: Adjustment Factor = eFm - erD L eSm eSbJ 2. Fuel costs (F) shall be the cost of: (i) Fossil and nuclear fuel consumed in the Company's own plants, and the Company's share of fossil and nuclear fuel consumed in jointly owned or leased plants. (ii) Plus, the actual identifiable fossil and nuclear fuel costs associated with energy purchased for reasons other than identified in (iii) below. (iii) Plus, the net energy cost of energy purchases, exclusive of capacity or demand charges (irrespective of the designation assigned to such charges), when such energy is purchased on an economic dispatch basis. Included therein may be such costs as: (1) charges incurred for economy energy purchases and (2) charges incurred as a result of scheduled outages, all such kinds of energy being purchased by the Company to substitute for its own higher cost energy. (iv) Less, the cost of fossil and nuclear fuel recovered through inter -system sales, including the fuel costs recovered from economy energy sales and other energy sold on an economic dispatch basis. 3. Sales (S) shall be equated to: (i) the sum, measured at the bus -bar or interconnection point, of (1) generation, (2) purchases, and (3) interchange -in, (ii) less (1) inter -system sales, as referred to in 2.(iv) above, and (2) inter -system losses. A-4 4. "L", the adjustment for wholesale losses, determined at the wholesale delivery points, shall be equal to: 1.039 = 1 1 - J . / -),+ A 5. The current month adjustment for prior wholesale over or under collections shall be calculated as: (i) the first prior month's (p) actual fuel costs (aF) divided by actual sales (aS), (ii) minus that month's (p) estimated fuel costs (eF) divided by estimated sales (eS), (iii) times the wholesale loss adjustment (L), (iv) times actual wholesale sales (W) in that month (p) for each customer. Adjustment Amount = CaFP _ eFI- (Wp) aSp eSpII The adjustment amount shall be debited or credited to the current month's billing. 6. (i) The fuel cost adjustment factor calculation shall not include: (1) the net energy cost of electric energy purchased from Celanese Corporation and, (2) the kilowatt-hours generated at the Celanese Corporation chemical plant, not to exceed the amount of electric energy consumed at that plant. (ii) The fuel cost adjustment factor calculation shall include both the net energy cost of energy purchased from Celanese, and the kWh generated at its plant, for any amount of energy which does exceed the amount consumed at that plant. A-5 SERVICE SCHEDULE A ATTACHMENT 2 SOUTHWESTERN PUBLIC SERVICE COMPANY WESTERN SYSTEMS POWER POOL EXPERIMENTAL SALES BENEFITS CREDIT RIDER To credit seventy-five percent of the benefits derived from transac- tions under the Western Systems Power Pool (WSPP) Experiment, the total billings for wholesale requirements service rendered during each billing month shall be decreased by a dollar amount calculated as follows using actual data from the month just prior to the current billing month. WSPP Credit = .75 (B-A)1 * L * We C L S J Where: B = the actual benefits from WSPP transactions for the prior month defined as WSPP sales revenues less WSPP sales fuel cost, variable supervision and engineering maintenance expense (account 510) of .10 mills/kWh, variable boiler plant maintenance expense (account 512) of .35 mills/kWh, and variable electric plant expense (account 513) of .25 mills/kWh; S = the total actual applicable Sales for the prior month is defined as the sum of generation, purchases, and interchange -in less inter- system sales, with losses, and energy generated at the Celanese Corporation chemical plant. A = the actual out-of-pocket administrative expenses incurred in the prior month because of Southwestern's participation in the WSPP Experiment. This expense shall include applicable filing fees, outside services fees and direct expenses paid to the WSPP for data processing, interconnection fees, report preparation, etc. If administrative expenses exceed the benefits of sales in the month, no credit will be given and expenses above benefits will be accrued and applied in subsequent months to preclude application of negative credits. L = the loss adjustment factor for wholesale level losses equal to 1.039; and We = the wholesale requirements customer's total kilowatt-hours of purchases for the prior month. A-6 3g9_5 APPENDIX B FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF LUBBOCK, TEXAS AND SOUTHWESTERN PUBLIC SERVICE COMPANY This amendment revises the agreement between the City of Lubbock, Texas, a municipal corporation (hereinafter referred to as "the City") and Southwestern Public Service Company, a New Mexico corporation (hereinafter referred to as "the Company") executed the loth day of January, 1980, as amended by letter agreement dated May 7, 1985. The agreement is amended as follows: 1. Article XII, Section 12.1 is replaced in its entirety with the following article: ARTICLE XII TERM Section 12.1. This agreement shall remain effective, subject to the rights of termination set out above, through December 31, 2004. After December 31, 2004, this agreement shall continue from year to year thereafter, subject to termination by either party hereto by written notice of intention to terminate to the other party at least five (5) years prior to such intended termination." 2. A new Section 13.7 is incorporated into Article XIII of the agreement as follows: "Section 13.7. Because the parties to this Agreement have relied upon the unique skills and character of the other party, neither party shall assign this agreement or any portion of this agreement without the written consent of the other party, which consent will not be unreasonably withheld. The letters attached to this First Amendment reflect the intent of the City to assign this Agreement to the West Texas Municipal Power Agency and the intent of the Company to consent to the assignment as reflected by the request." This amendment shall become effective on the date approved by the Federal Energy Regulatory Commission. EXECUTED this 25th day of January , 1990. CITY OF LUBBOCK, TEXAS By: el C. MCMINN Title: MAYOR /-ATTEST-- �- SOUTH STERN PUBLIC SERV E, MPANY By: Fn k-A.-A 8e 4 Title: ``ice President B-1 k 3L�5 [Proposed letter from City of Lubbock to Southwestern Public Service Company] Southwestern Public Service Company P.O. Box 1261 Amarillo, TX 79170 Attention: Gary L. Gibson Vice President, Marketing Gentlemen: The City of Lubbock desires to assign to West Texas Munici- pal Power Agency the electric service agreement between the City of Lubbock, Texas, and Southwestern Public Service Company, ex- ecuted January 10, 1980, as amended by letter agreement dated May 7, 1985, and by a first amendment executed December , 1989 (the "Agreement"). Pursuant to Section 13.7 of the Agreement, we would appreciate receiving your written consent to the assign- ment. We will, of course, remain liable for the obligations of the purchaser of power and energy under the Agreement. In addi- tion, we will cause to be instituted a declaratory judgment action in the State of Texas for the purpose of obtaining a judg- ment that the West Texas Municipal Power Agency may lawfully receive, undertake and perform the rights and obligations which the City of Lubbock has under the Agreement. We will provide you with a copy of the assignment and a -copy of the judgment in the declaratory judgment action. Yours very truly, CITY OF LUBBOCK, TEXAS By Mayor [Proposed letter from Southwestern Public Service Company to the City of Lubbock] City of Lubbock, Texas P.O. Box Lubbock, TX Attention: Mayor Gentlemen: We have received your letter dated re- questing our written consent to your assigning to West Texas Municipal Power Agency the Agreement referred to in your letter. We agree to the assignment subject to the conditions contained in your letter. Yours very truly, SOUTHWESTERN PUBLIC SERVICE COMPANY By Gary L. Gibson Vice President, Marketing 95 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION SOUTHWESTERN PUBLIC SERVICE COMPANY ) DOCKET NO. RATE AGREEMENT This rate agreement ("Rate Agreement") dated January 25tK 1990, is the culmination of negotiations between Southwestern Public Service Company ("Southwestern") and the City of Lubbock, Texas ("Customer") regarding the level of rates being charged by Southwestern to Customer for partial requirements firm service. I. SUMMARY OF RATE AGREEMENT Southwestern and Customer have negotiated this Rate Agreement which incorporates a decrease in base rates of approximately 27 percent from the currently effective interim base rates. The purpose of this Rate Agreement is to reflect in Customer's base rates Southwestern's lower costs to provide service to Customer as of January 1, 1990. These lower costs of service result primarily from (1) the termination on December 31, 1989 of Southwestern's purchase of surplus energy from Public Service Company of New Mexico of.which a portion of the current reservation fee is included in Customer's existing base rates, (2) reduced capital costs, and (3) reduced federal income taxes arising from the Tax Reform Act of 1986. II. RATE SCHEDULES The rate schedules shown in Appendix A shall become effective on January 1, 1990 and shall replace the existing Service Schedule A. The rates will lock -in Customer's rate period in Docket No. ER85-477 and terminate Southwestern's collection of revenues subject to refund and surcharge in that docket. This Rate Agreement will not otherwise affect either the Docket No. ER84-604 or Docket No. ER85-477 cases. III. AMENDMENTS TO EXISTING AGREEMENT Customer and Southwestern have agreed to amend their existing agreement for the Customer's purchase of partial requirements power and energy. The amendments extend the minimum term through December 31, 2004. The amendments are shown on Appendix B. The letters attached to Appendix B reflect the intent of Customer to assign its agreement to the West Texas Municipal Power Agency and the intent of Southwestern to consent to the assignment as reflected by the request. IV. OTHER PROVISIONS (A) With respect to Customer's prorata share of the items listed below, the Commission's order approving this Rate Agreement shall constitute final authorization for Southwestern to utilize the following accounting principles for the period commencing January 1, 1990: a. Southwestern will continue to utilize full tax normalization as required by the Federal Energy Regulatory Commission; b. Southwestern's "South Georgia Catch-up" deferred tax provision will be based on the current federal income tax rate of 34 percent; -2- C. Southwestern will book its applicable book depreciation expense based. on its 1988 depreciation study which includes a composite rate of 2.93 percent; and d. Southwestern will amortize the cost associated with the coal slurry research and development project through the year 2002. (B) If another partial requirements customer of Southwestern obtains a rate, including terms and conditions, different from that contained in this Rate Agreement, Southwester-n will make the different rate, including all the terms and conditions, available to Customer at Customer's option. If accepted by Customer, the different rate will be effective at the same time it is effective for the other customer. (C) Customer agrees it will withdraw its pending complaint against Southwestern (Docket No. EL89-51-000). (D) Nothing contained in this Rate Agreement shall be construed as affecting in any way (a) the right of the party furnishing, causing to be furnished, or receiving service under the new rate schedules to unilaterally make application to the Federal Energy Regulatory Commission or other governmental body having jurisdiction for a change in rates or charges under Section 205 of the Federal Power Act and pursuant to the Commission's Rules and Regulations promulgated thereunder, and (b) the right of Customer to protest, object or to intervene concerning any such application by Southwestern or to make complaint before any governmental body having jurisdiction or petition for an investigation under Section 206 of the Federal Power Act concerning rates and charges, classification of service, or any provision, term, rule, regulation, condition of service or contract relating thereto. -3- V. COMMISSION APPROVAL This Rate Agreement shall become effective and binding only after the Commission has entered a final order approving it, without adding or imposing any condition or modification that is unacceptable to Southwestern or Customer. If the Commission does not approve this Rate Agreement without modification, either party may terminate this Rate Agreement in writing within 15 days after the Commission issues its order. VI. RESERVATIONS The various provisions of this Rate Agreement are not severable. Neither Customer nor Southwestern shall be deemed to have approved, accepted, agreed to, or consented to any concept, theory, principle or method underlying any of the rates, charges, classifications, cost of service, or any other matter, other than specifically provided for in this Rate Agreement. The provisions of this Rate Agreement are intended to relate only to the specific matters described herein. This Rate Agreement is executed as of the date first above written. CITY OF LUBBOCK, TEXAS By: e ' . C. McMINN Title: yAVQR, SOUTHWESTERN PUBLIC SERVICE COMPANY By: Title: -4- APPENDIX A SERVICE SCHEDULE A FIRM POWER ARTICLE A-1 Definitions In addition to the words and terms defined in the Agreement to which this Service Schedule is attached, the following words and terms as used in this Service Schedule, shall have the following meanings unless the context or use indicates another or different meaning or intent. Section A-1.1. The term "Firm Power" as that term is used herein shall mean that quantity of electric power and energy, that Company will have available monthly to Customer in accordance with the terms and conditions of this Agreement. Section A-1.2. The term "kW" as that term is used herein shall mean kilowatt-hour per hour. Section A-1.3. The term "billing demand" as that term is used herein shall mean the quantity of firm power, expressed in kilowatts designated as provided in Section A-2.1. hereof and subject to the provisions of Sections A-4.1. and A-4.2. hereof. ARTICLE A-2 Designations of Quantities of Firm Power Section A-2.1. The Firm Power commitment for calendar years 1990 through 1994 shall be as follows: Calendar Year Firm Power Commitment 1990 20,000 kW 1991 20,000 kW 1992 25,000 kW 1993 30,000 kW 1994 40,000 kW On the first working day of 1991 and on the first working day of each calendar year thereafter during the life of the Agreement, City will submit to Company its Firm Power Commitment for the fifth succeeding year. City shall have the right to increase or decrease by not .more than 30 percent (and then rounded to the nearest whole MW) the original nomination for any particular year, provided it does so in writing one year in advance of the affected year. Company will make such firm electric power and energy available to City as nominated, provided that Company has sufficient capacity in its existing facilities for any request for an increase in the Firm Power Commitment. A-1 ARTICLE A-3 Rates for Firm Power Section A-3.1. During the term of this Agreement or any extensions or renewals thereof, and subject to change as hereinafter provided, Customer hereby agrees to pay Company for firm power at the following monthly rates: Customer Charge: $320.00 per month per delivery point, Demand Charge: $6.80 per kW of firm power for all billing demand, and Energy Charge: .07c per kWh for all energy delivered. Section A-3.2. Fuel Cost Adjustment: The above energy charges will be increased per kWh of sales equal to the estimated fuel cost per kWh of sales in the current month and adjusted for the preceding month's estimate error. The energy charge adjustment shall be calculated in compliance with the formula and conditions set forth in the Wholesale Fuel Cost Adjustment Clause contained in Attachment 1 to this Service Schedule. Base period fuel cost per kWh of net generation is equal to zero cents. Section A-3.3. Billings under this Schedule may be increased by an amount equal to the sum of the taxes payable under federal, state and local sales tax acts, and all of the additional taxes, fees, or charges, (exclusive of ad valorem, state and federal income taxes) payable by the Company and levied or assessed by any governmental authority on the Company services rendered, or on the right or privilege of rendering the service, or on any object or event incidental to the rendition of the service, as the result of any new amended laws after January 1, 1990. ARTICLE A-4 Billing Demand Adjustments Billing demand shall be subject to the following adjustments: Section A-4.1. In the event the Company is unable to furnish the quantities of firm power designated by the City (as a result of force majeure) or in the event the City is unable to receive the quantities of firm power previously designated by the City (as a result of force majeure), billing demand shall be adjusted downward to the maximum power actually supplied, such downward adjustment to be effective from the date Company is so unable to furnish such quantities of firm power or from the date the City is so unable to receive such quantities of firm power, whichever is earlier, and shall be effective until such time as the reason thereafter is cured. Section A-4.2. In the event the City requests quantities of power exceeding the billing demand (hereinunder called excess billing demand) and Company provides such quantities as part of the Firm Power Commitment, the Firm Power Commitment, and the billing demand shall be adjusted upward by the Company by the amount of the excess billing demand, which adjustment shall be effective from the date such excess quantities are supplied and extending thereafter until changed as provided under Section A-2.1 above. If Company is not agreeable to providing such additional demand as part of the Firm Power A-2 Commitment, the City shall pay for the excess demand only for the billing month(s) in which the excess was taken. The Customer's excess billing demand shall be exempt from this adjustment if such excess is caused by an emergency or a non -firm energy sale. In that event, such excess shall be billed under the provisions of the applicable service schedule. A-3 SERVICE SCHEDULE A ATTACHMENT 1 WHOLESALE FUEL COST ADJUSTMENT CLAUSE 1. The charges for actual wholesale service rendered during the current billing period shall be increased or decreased by an adjustment amount, per kilowatt-hour of sales (to the nearest 0.0001c), equal to the difference between the estimated fuel cost (eF) per kilowatt-hour of estimated sales (eS) in the current, or billing, period (m) and the base period (b), as adjusted to allow for wholesale losses (L), with the total charges adjusted by a dollar amount to correct for prior wholesale over or under collections: Adjustment Factor = eFm - eFb L eSm eSb 2. Fuel costs (F) shall be the cost of: (i) Fossil and nuclear fuel consumed in the Company's own plants, and the Company's share of fossil and nuclear fuel consumed in jointly owned or leased plants. (ii) Plus, the actual identifiable fossil and nuclear fuel costs associated with energy purchased for reasons other than identified in (iii) below. (iii) Plus, the net energy cost of energy purchases, exclusive of capacity or demand charges (irrespective of the designation assigned to such charges), when such energy is purchased on an economic dispatch basis. Included therein may be such costs as: (1) charges incurred for economy energy purchases and (2) charges incurred as a result of scheduled outages, all such kinds of energy being purchased by the Company to substitute for its own higher cost energy. (iv) Less, the cost of fossil and nuclear fuel recovered through inter -system sales, including the fuel costs recovered from economy energy sales and other energy sold on an economic dispatch basis. 3. Sales (S) shall be equated to: (i) the sum, measured at the bus -bar or interconnection point, of (1) generation, (2) purchases, and (3) interchange -in, (ii) less (1) inter -system sales, as referred to in 2.(iv) above, and (2) inter -system losses. A-4 4. "L", the adjustment for wholesale losses, determined at the wholesale delivery points, shall be equal to: 1.039 = 1 1 - 3.754% 5. The current month adjustment for prior wholesale over or under collections shall be calculated as: (i) the first prior month's (p) actual fuel costs (aF) divided by actual sales (aS), (ii) minus that month's (p) estimated fuel costs (eF) divided by estimated sales (eS), (iii) times the wholesale loss adjustment (L), (iv) times actual wholesale sales (W) in that month (p) for each customer. Adjustment Amount = a..�L - eFPI (L) (Wp) aSp eSp The adjustment amount shall be debited or credited to the current month's billing. 6. (i) The fuel cost adjustment factor calculation shall not include: (1) the net energy cost of electric energy purchased from Celanese Corporation and, (2) the kilowatt-hours generated at the Celanese Corporation chemical plant, not to exceed the amount of electric energy consumed at that plant. (ii) The fuel cost adjustment factor calculation shall include both the net energy cost of energy purchased from Celanese, and .the kWh generated at its plant, for any amount of energy which does exceed the amount consumed at that plant. A-5 SERVICE SCHEDULE A ATTACHMENT 2 SOUTHWESTERN PUBLIC SERVICE COMPANY WESTERN SYSTEMS POWER POOL EXPERIMENTAL SALES BENEFITS CREDIT RIDER To credit seventy-five percent of the benefits derived from transac- tions under the Western Systems Power Pool (WSPP) Experiment, the total billings for wholesale requirements service rendered during each billing month shall be decreased by a dollar amount calculated as follows using actual data from the month just prior to the current billing month. WSPP Credit = `• 75 (B-Ail * L * We l S Where: B = the actual benefits from WSPP transactions for the prior month defined as WSPP sales revenues less WSPP sales fuel cost, variable supervision and engineering maintenance expense (account 510) of .10 mills/kWh, variable boiler plant maintenance expense (account 512) of .35 mills/kWh, and variable electric plant expense (account 513) of .25 mills/kWh; S = the total actual applicable Sales for the prior month is defined as the sum of generation, purchases, and interchange -in less inter- system sales, with losses, and energy generated at the Celanese Corporation chemical plant. A = the actual out-of-pocket administrative expenses incurred in the prior month because of Southwestern's participation in the WSPP Experiment. This expense shall include applicable filing fees, outside services fees and direct expenses paid to the WSPP for data processing, interconnection fees, report preparation, etc. If administrative expenses exceed the benefits of sales in the month, no credit will be given and expenses above benefits will be accrued and applied in subsequent months to preclude application of negative credits. L = the loss adjustment factor for wholesale level losses equal to 1.039; and Wc = the wholesale requirements customer's total kilowatt-hours of purchases for the prior month. A-6 APPENDIX B FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF LUBBOCK, TEXAS AND SOUTHWESTERN PUBLIC SERVICE COMPANY This amendment revises the agreement between the City of Lubbock, Texas, a municipal corporation (hereinafter referred to as "the City") and Southwestern Public Service Company, a New Mexico corporation (hereinafter referred to as "the CompanyB1) executed the loth day of January, 1980, as amended by letter agreement dated May 7, 1985. The agreement is amended as follows: 1- Article XII, Section 12.1 is replaced in its entirety with the following article: It ARTICLE XII TERM Section 12.1. This agreement shall remain effective, subject to the rights of termination set out above, through December 31, 2004. After December 31, 2004, this agreement shall continue from year to year thereafter, subject to termination by either party hereto by written notice of intention to terminate to the other party at least five (5) years prior to such intended termination." 2. A new Section 13.7 is incorporated into Article XIII of the agreement as follows: "Section 13.7. Because the parties to this Agreement have relied upon the unique skills and character of the other party, neither party shall assign this agreement or any portion of this agreement without the written consent of the other party, which consent will not be unreasonably withheld. The letters attached to this First Amendment reflect the intent of the City to assign this Agreement to the West Texas Municipal Power Agency and the intent of the Company to consent to the assignment as reflected by the request." This amendment shall become effective on the date approved by the Federal Energy Regulatory Commission. EXECUTED this 25th day of January 1990. CITY OF LUBBOCK, TEXAS SOUTHWESTERN PUBLIC SERVICE COMPANY By: By: B. C.McMINN, Title: MAYOR Title: ATTEST B-1